Do You Use Dave Ramsey’s Debt Snowball to Pay Off Debt?

Dave Ramsey’s Debt Snowball doesn’t make mathematical sense, but it works.  Many people will claim that paying the highest interest debt first is what will get you out of debt sooner.  Yes, that makes sense when you look at the numbers.  Paying highest interest debt first means you’ll pay off the more expensive debts sooner, thereby, saving you money in the long-run.  

But, when it comes to personal finance, you can’t always think about the numbers and math.  Dave Ramsey’s Debt Snowball is a debt payoff method that considers the behavioral side of paying off debt.  Here’s Dave’s thoughts:

What I have learned is that personal finance is 20% head knowledge and 80% behavior.You need some quick wins in order to stay pumped enough to get out of debt completely.

How Does Dave Ramsey’s Debt Snowball Work?

Dave Ramsey Debt SnowballDave Ramsey says to first save $1000 in an emergency savings account so that you don’t go deeper into debt when financial emergencies arise.  The $1000 typically covers you from most minor emergencies which range from $100 to several $100.

The best way to get started paying off debt with Dave Ramsey’s debt snowball is to list all your debts from lowest balance to highest, ignoring the interest rates.  The only time you don’t ignore the interest rates is when you have two debts with almost the same balance.  In that case, list the higher interest debt first.  Pay the minimum payments on all your debts except the first one.  The first debt payment should be the minimum plus the additional amount you think you can pay extra towards your debt each month.  Hopefully, you can find some amount, even if it’s small, to pay extra.  Doing so may require reducing expenses or generating additional income with a part-time job.

Once you pay off your first debt, you snowball your payment to the next debt.  So your next debt payment will be the minimum amount on your first debt, plus the extra amount you were paying on it, plus the minimum payment on your second debt.  You’re compounding your debt payments as you make your way through each debt creating a payment snowball that gets larger the further you get down your list.  Overall, it’s a pretty simply method to understand, but it works as you’ll find when you listen to Dave’s weekly radio show.  Many listeners call in with their success stories.

Motivated by Your Success

The behavioral side of the method is with the wins you experience by paying the smaller debt first. You’ll see that you can be successful in paying off debt sooner by paying off a small debt instead of tackling a big one with higher interest.  This is motivating and encouraging for a lot of people and helps them work harder to pay off debt.  Some people get so excited they start selling things to increase their debt payments, or even work a part-time job for a defined time period or until their debt is paid off.

Getting into debt and recognizing you have a problem to overcome can be frustrating, frightening and stressful.  A lot of people pay for debt settlement and other services, but Dave’s method is about hard work and dedication to the Debt Snowball.  Yes, I said hard work.  You have to be willing to balance a budget to find extra money to pay on your debts.  You also have to sometimes be willing to work hard to earn more money to pay on your debts.

Have you tried Dave Ramsey’s debt snowball?  If so, please share your experience in the comments.

About Jason Price

Jason Price is a family man saved by grace, passionate about faithful financial stewardship (1 Cor 4:2 NIV), soccer and the Pacific sun.

  • Cherleen @ My Personal Finance Journey

    After reading this post, it was then that I realized I did a snowball technique to pay off the balance of my two credit cards. It was so stressful paying three cards at the same time. Moreover, I am already having difficulty paying for them. I knew I have to make a decision that time.

    So, I transferred the balance of my first credit card to my 3rd card and cancelled it. While paying for the balance transfer, I am also paying the minimum amount on the balance of both my second and third cards.

    When the first balance transfer was done, I did the same thing to my second card, which left me paying one card, though 2 debts in reality – the balance transfer and the balance of the third card. But it was easier this time because I am only paying one bill, plus I can now pay more than the minimum amount because I now have extra money after paying off the first card. I did this technique until the balance transfer for the second card was paid off.

    After the second balance transfer, I used the money allotted on my budget to start paying off the balance on my card. Now, I maintain only one card and I pay it off every end of the month. Less stress, less hassle. More importantly,lesson learned. Admittedly though, I have to learn it the hard way.

    • Jason Price

      Cherleen, many of us have learned the hard way including my wife and I. I have an upcoming post where I share our debt story. Congratulations on doing so well to pay down your debts. Balance transfers appear to have worked for you. I know many people do transfers and leave a card open thinking they can then spend on it because the balance is zero. But great job to you to keep your snowball rolling and being committed to getting out of credit card debt. Great story to share with readers!

      • Cherleen @ My Personal Finance Journey

        Thank you. I hope I will inspire your readers, too.

  • 20′s Finances

    I haven’t used this, but that is because I have been lucky to avoid debt. I do have friends that swear by Dave Ramsey though. I tend to agree that it is about motivation and celebrating the small victories, not just what makes the most sense on paper.

    • Jason Price

      20′s, yes, the motivation side of paying off debt was something I was hoping to share with readers in this post. I believe in the method and share it with people when I do volunteer financial coaching.

  • Barnabas Willis

    I remember hearing this strategy in one of Dave Ramsey’s classes. I think it’s genius. I recently got married and plan on using this method with our debt. Thanks for the reminder…this is an excellent way to tackle debt.


  • Allan Henry

    Dave Ramsey’s techniques are truly fantastic. I have heard a lot of strategies during his classes and I am very happy with the results when I implemented his teachings.

    I also find another website that offers good strategies to fight debts, click